Correlation Between BYD Co and Metro Investment
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By analyzing existing cross correlation between BYD Co Ltd and Metro Investment Development, you can compare the effects of market volatilities on BYD Co and Metro Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BYD Co with a short position of Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Metro Investment.
Diversification Opportunities for BYD Co and Metro Investment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYD and Metro is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev and BYD Co is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BYD Co Ltd are associated (or correlated) with Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of BYD Co i.e., BYD Co and Metro Investment go up and down completely randomly.
Pair Corralation between BYD Co and Metro Investment
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 0.59 times more return on investment than Metro Investment. However, BYD Co Ltd is 1.7 times less risky than Metro Investment. It trades about 0.08 of its potential returns per unit of risk. Metro Investment Development is currently generating about 0.01 per unit of risk. If you would invest 19,395 in BYD Co Ltd on August 31, 2024 and sell it today you would earn a total of 8,063 from holding BYD Co Ltd or generate 41.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Metro Investment Development
Performance |
| Timeline |
| BYD Co |
| Metro Investment Dev |
BYD Co and Metro Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Metro Investment
The main advantage of trading using opposite BYD Co and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Metro Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Metro Investment will offset losses from the drop in Metro Investment's long position.| BYD Co vs. Kingclean Electric Co | BYD Co vs. Keda Clean Energy | BYD Co vs. CSSC Offshore Marine | BYD Co vs. Dhc Software Co |
| Metro Investment vs. Kweichow Moutai Co | Metro Investment vs. Contemporary Amperex Technology | Metro Investment vs. G bits Network Technology | Metro Investment vs. BYD Co Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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